A power outage and mobile money blackout expose the vulnerability of Zimbabwe’s economy

On Saturday morning (Jul. 20) local time Zimbabweans experienced a system blackout on Econet Wireless, the country’s biggest telecoms operator after a significant power outage.

Econet says the network challenges were caused by a fault that started when generators at its operations centre failed to kick in after a Zimbabwe Electricity Supply Authority (Zesa) power outage.

But a power cut to Econet’s servers is no mere outage. It is effectively a major disruption to an already troubled economy teetering on the edge as it means 70% of Zimbabweans had no phones, internet and crucially EcoCash mobile money services. More than 14 million subscribers were caught off guard. People were stuck in banking halls, fuel queues, supermarkets and commuters to various places were stranded.

And in what seems like a never-ending cycle of misery for ordinary Zimbabweans in the last year, it is likely there will be more power cuts and ultimately more economic disruption due to the country’s currency troubles and—now, climate change.

Zesa has recently introduced an 18-hour load shedding schedule in most parts of the country because Zimbabwe relies on hydroelectric power from Lake Kariba along the border with Zambia where ongoing drought means water levels have dropped so low it’s forcing reduced electricity production.

In addition, Zesa owes over $50 million to Eskom in South Africa where it also get some of its electricity and the Zimbabwean government has repeatedly stated it doesn’t have enough foreign currency to settle the debt.

As for mobile operators they now have a significant expense as they have to use generators to power their stations but even that challenge is exacerbated because the country is in the middle of a fuel scarcity crisis which is causing prices of diesel to spike.

There are now real fears mobile operators will introduce a system where users in some parts of the country will not be able to access certain services on their networks as it has become too expensive to power up network towers using generators.

Zimbabwe’s economy has been deteriorating since president Emmerson Mnangagwa took over from his mentor Robert Mugabe in November 2017 through a military coup. The finance minister Mthuli Ncube last month scrapped a multi-currency regime and introduced a local currency which has not helped the situation by adding more uncertainty.

While some of the services had been restored eight hours later in the evening, subscribers were still reported to be having difficulties with Ecocash.

Economists see this as a huge blow to the economy as large chunks of the country’s economy runs through runs through electronic systems and mobile money dominated by EcoCash with 95% market share. It’s estimated around 5 million transactions a day more more than $200 million.